If they copied HTML code, or graphics, then sure. But if they looked at the site and incorporated similar elements and wording, which seems to be what happened,

If they copied HTML code, or graphics, then sure. But if they looked at the site and incorporated similar elements and wording, which seems to be what happened, I'd say "meh - it happens". IMHO not getting the .com is a really bad idea. The best case scenario is you start paying adwords a ton of money to get the traffic. Worst case is probably what happened here.